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The new profit-sharing ratio of A and B is 9:7. If B’s old share of profit was \(3/8\), what is B’s gaining share?

Answer and explanation

Correct answer: \(1/16\)

In the new ratio 9:7, the total number of parts is 16, so B’s new share is \(7/16\). B’s old share \(3/8\) is equal to \(6/16\). Therefore, B’s gaining share = new share − old share = \(7/16-6/16=1/16\). Option C is only B’s old share, not the gain. Exam tip: Calculate gaining share as new share minus old share.

Related tags

Gaining ShareNew RatioRetirement Of PartnerPartnership AccountsProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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